Congestion issues at West Coast ports caused container terminals at the Port of Long Beach to move 20 percent fewer containers in February compared to the same month in 2014, said the port on March 17 (here). Imports were down 24.7 percent at the Port of Long Beach, and exports fell 22.9 percent. Empty containers moving overseas fell by 3.9 percent, it said. Although February marked the third straight month of drastic declines in containers moving through the port, the outlook for the future is rosier on account of the deal struck in February by longshoremen and West Coast ports (see 1502230002), said the Port of Long Beach. Also contributing to congestion relief going forward is the approval of a deal between the Ports of Long Beach and Los Angeles to collaborate on congestion relief, and private chassis fleets in the region reaching an agreement to pool their resources, said the port.

The Federal Maritime Commission should request that the four major shipping alliances "provide new information on the steps each is taking to reduce congestion at U.S. ports," said FMC Commissioner Michael Khouri (here). "In terms of overall costs and service levels in the liner supply chain as experienced by U.S. exporters and importers, there has been a deterioration in service and significant increase in costs due to several factors," he said. Loading practices at Asian ports have allegedly resulted in the need for "additional intra-facility ground moves to and among each of the local terminals operated by the individual alliance members before the container is dispatched out of the port complex," said the press release. The FMC approved the alliances as long as "the alliance agreement will not produce unreasonable reductions in transportation service or unreasonable increase in transportation cost," it said.

A weeklong “longshore contract caucus" opens March 30 in San Francisco, where 90 “delegates” representing the 29 West Coast ports will vote up or down whether to send a contract proposal on to the 13,000 International Longshore and Warehouse Union members for secret balloting with a positive recommendation, said union officials. They wouldn’t speculate how long the balloting process might take. The IWLU reached a tentative labor deal with the Pacific Maritime Association last month (see 1502230002). Despite the agreement, workers from ILWU's Local 10 were dismissed from the Port of Oakland March 9 and 11 "after they refused to work due to a dispute over staffing levels," according to the port (see 1503120022). Representatives at ILWU’s central headquarters in San Francisco referred queries to Local 10 President Melvin MacKay, who did not respond to requests for comment.

Port shutdowns caused by labor-management disputes continued at the Port of Oakland March 9 and 11, despite a tentative deal reached in February between the International Longshore and Warehouse Union and the Pacific Maritime Association (see 1502230002). The Oakland International Container Terminal, one of five at the port, sent longshoremen home early on March 11 “after they refused to work due to a dispute over staffing levels,” according to an update on the Port of Oakland website (here). The same terminal also had a “labor-management staffing issue” on March 9 that resulted in import containers not being “available for pick-up.” All marine terminals, including the Oakland International Container Terminal, were back open as of 9:25 a.m. PDT on March 12, according to the Port of Oakland.

Skullcandy spent more than $1.1 million on air freight in Q4 to circumvent the West Coast ports slowdown and deliver headphones and other consumer products to retail for the crucial holiday selling season, Chief Financial Officer Jason Hodell said March 5 on an earnings call. For Q4, the company also estimates it had about $3 million worth of inventory sitting “unfortunately idle” at the port of Seattle while the labor slowdowns continued, Hodell said. “Without the port slowdown, this inventory would likely have been consumed in Q4,” he said. As the West Coast ports crisis wasn’t resolved until the breakthrough in contract negotiations in late February and backlogs were expected to continue for weeks thereafter (see 1502240004), Skullcandy anticipates incurring additional air freight costs that will reduce earnings per share by at least a penny when it reports Q1 results, he said. But "this is a short-term issue,” he said.

The Panama Canal expansion project will help pave the way for more U.S. trade with Asia, a trend expected to continue if a Trans-Pacific Partnership is finalized, by offering an alternative shipping route to the Suez Canal, said panelists at the International Chamber of Commerce and U.S. Council for International Business symposium on Feb. 24 in Miami. The expansion will allow ships to pass through with more than 14 ft. in depth, said one expert, as well as 13,000 twenty-foot equivalent units in size (see 14022816).

The Federal Maritime Commission is "evaluating" the use of port congestion-related demurrage fees by carriers and terminal operators, said FMC Chairman Mario Cordero in testimony Feb. 25. Cordero discussed the agency with the House Marine Transportation Subcommittee during a hearing (here). "Many shippers" say such fees are unfair, he said. "With disappointing frequency, the Commission is receiving complaints by shippers about how shippers are repeatedly told that they may not retrieve a container due to on-dock congestion or delays at the gate. Worse yet, some shippers find out that once the container is finally made available, the carrier and marine terminal operator will not release it until the shipper pays demurrage for not picking up the container before free-time expires. " The question of the legality of such charges recently came up in relation to congestion issues at the West Coast ports (see 1411180015).

Despite a tentative agreement between the Pacific Maritime Association and the International Longshore and Warehouse Union, it will take some time before the West Coast ports can get up to full speed. "My understanding is that it’s going to take quite some time for the backlog to clear out,” said Sage Chandler, Consumer Electronics Association vice president-international trade. “I’ve heard companies saying they expect things will be slow for another month.” There’s “just so much backlog that’s going to continue to affect things, but companies certainly are breathing a major sigh of relief” that a contract settlement was finally reached, she said. The agreement must be ratified by the two sides (see 1502230002).

Labor Secretary Tom Perez is giving the Pacific Maritime Association and the International Longshore and Warehouse Union until Feb. 20 to reach an agreement on the months-long labor contract impasse at West Coast ports, National Retail Federation trade expert Jonathan Gold said in a statement (here). If the two sides fail to strike a deal, Perez should send contract negotiators to Washington to bring a final resolution on a new contract, said Gold.

Congestion at the West Coast seaports hurt cargo movement in January at the Port of Long Beach, the port said (here). The month's containerized cargo imports accounted for some 213,667 twenty-foot equivalent units (TEUs), a 23.5 percent decline from January 2014, it said. Exports were down 19.6 percent to 98,462 TEUs and empty containers declined 7.6 percent to 117,361 TEUs, said the port. The decreases were a result of the congestion and related labor contract dispute, the port said. “We have been strongly urging the two parties to come to an agreement on a new contract, so that we can clear the backlog of cargo on the docks and the ships anchored off the coast,” said Port of Long Beach Chief Executive Jon Slangerup. “We are encouraged by recent progress through federal mediation and are hopeful that the contract will be signed soon, so that the Port complex can focus on returning operations to a normal pace.”